4/29/2011 4:33 PM ET
50 stocks to buy in May
StockScouter, MSN Money's stock-picking tool, identifies companies capable of outperforming the broader market in the weeks ahead.
Midway through earnings season, quarterly profits are on track for a seventh consecutive double-digit gain. But the quality of those earnings is being debated.
Optimists say profits are better this quarter than they've been in the recent past because they're based more on revenue growth and less on cost cuts.
Those making the glass-half-empty argument point out that temporary tax breaks are goosing profits, and companies are sowing the seeds of shrunken profits by raising prices in response to higher commodity costs.
Less consumer spending is the main reason for a sharp slowdown in the economy in the first quarter. But Federal Reserve officials said the tepid 1.8% gain in first-quarter gross domestic product was largely the result of "transitory" issues in the United States and elsewhere, and they expect GDP to accelerate in the second quarter.
MSN Money's StockScouter tool has generated a list of 50 stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price this coming month, based on how those factors have influenced stock prices in the past.
Here are StockScouter's best investment ideas for May:
|Benchmark portfolio for May|
|Company||Sector||April 29 close||Scouter score|
|Williams Partners (WPZ, news)||Natural gas||$55.80||10|
|NuStar GP (NSH, news)||Oil and gas pipelines||$39.63||10|
|Western Gas Partners (WES, news)||Oil and gas pipelines||$36.70||10|
|Constellation Brands (STZ, news)||Alcoholic beverages||$22.39||10|
|Kinetic Concepts (KCI, news)||Medical technology||$59.03||10|
|Core Laboratories (CLB, news)||Oil-field services||$95.98||10|
|Royal Gold (RGLD, news)||Precious metals royalties||$60.98||10|
|Alliance Resource Partners (ARLP, news)||Coal||$82.36||10|
|Dr. Reddy's Laboratories (RDY, news)||Pharmaceuticals||$39.24||10|
|Millicom International Cellular (MICC, news)||Mobile communications||$108.34||10|
|Kayne Anderson Energy Development (KED, news)||Investments||$19.60||10|
|Pioneer Southwest Energy Partners (PSE, news)||Oil and natural gas||$35.53||10|
|Brasil Telecom (BTM, news)||Telecommunications||$28.20||10|
|Bruker (BRKR, news)||Scientific instruments||$19.74||10|
|Albemarle (ALB, news)||Specialty chemicals||$70.55||10|
|Carbo Ceramics (CRR, news)||Oil-field services||$160.94||10|
|Bill Barrett (BBG, news)||Oil and gas exploration||$41.73||10|
|Harmony Gold Mining (HMY, news)||Mining||$15.57||10|
|Cleco (CNL, news)||Electric utilities||$35.10||9|
|Techne (TECH, news)||Biotechnology||$77.71||9|
|DPL (DPL, news)||Electric utilities||$30.29||9|
|Cabot Oil & Gas (COG, news)||Oil and natural gas||$56.28||8|
|Myriad Genetics (MYGN, news)||Diagnostic tests||$21.44||8|
|Cepheid (CPHD, news)||Diagnostic tests||$32.31||8|
|Comstock Resources (CRK, news)||Oil and natural gas||$32.06||8|
|St. Joe (JOE, news)||Real estate development||$26.12||8|
|Eldorado Gold (EGO, news)||Mining||$18.63||8|
|Alexion Pharmaceuticals (ALXN, news)||Pharmaceuticals||$96.87||9|
|Linn Energy (LINE, news)||Oil and natural gas||$40.38||9|
|Hill Rom (HRC, news)||Medical technology||$45.01||9|
|Charles River Laboratories (CRL, news)||Biotechnology||$42.19||9|
|Natural Resource Partners (NRP, news)||Coal||$34.41||9|
|Sociedad Química y Minera (SQM, news)||Specialty chemicals||$61.03||9|
|Immucor (BLUD, news)||Medical products||$21.83||9|
|Pioneer Natural Resources (PXD, news)||Oil and natural gas||$102.23||9|
|Polo Ralph Lauren (RL, news)||Apparel||$130.77||9|
|Idacorp (IDA, news)||Electric utilities||$39.21||9|
|NuVasive (NUVA, news)||Medical technology||$30.89||8|
|Alkermes (ALKS, news)||Biotechnology||$14.42||8|
|Pan American Silver (PAAS, news)||Mining||$36.12||8|
|PDL BioPharma (PDLI, news)||Biopharmaceuticals||$6.42||8|
|Haemonetics (HAE, news)||Medical supplies||$70.20||9|
|Allete (ALE, news)||Electric utilities||$40.49||9|
|MGE Energy (MGEE, news)||Electric utilities||$42.01||9|
|Gen-Probe (GPRO, news)||Diagnostic tests||$82.92||9|
|El Paso Electric (EE, news)||Electric utilities||$30.98||9|
|Idexx Laboratories (IDXX, news)||Veterinary products||$81.43||9|
|Dentsply International (XRAY, news)||Dental supplies||$37.55||9|
|Perrigo (PRGO, news)||Health care supplies||$90.36||9|
|Hasbro (HAS, news)||Toys and games||$46.84||9|
Put StockScouter to work
Investment research firm Gradient Analytics uses StockScouter to create daily and monthly stock lists. Writer Jon Markman, at the time a columnist for MSN Money, collaborated with the company to devise strategies for putting the tool to work.
One of Markman's strategies involved investing an equal amount of money in each of the stocks in the computer-generated portfolio, selling them six months later, then beginning the process again. For investors who prefer to handle fewer stocks, Markman recommended using the strategy with just the top 10 stocks on the list.
An investor who followed Markman's 10-stock strategy since it was launched would have realized a gain of 693% through March 31, according to Gradient Analytics, and had an average annual return of 23.4%.
Over the same period, the Standard & Poor's 500 Index ($INX) rose by 9.5%.
An innovative mix
StockScouter depends on advanced mathematics and software and an innovative mix of measurements and historical testing to forecast the short- and long-term outlook for all U.S. companies that have traded on the major exchanges for at least the past six months.
The analytical tools are applied to score stocks on fundamental, valuation, technical and ownership components.
This score is combined with each company's StockScouter rating to come up with the list in the above chart. Only stocks with a final closing price above $3 are eligible for the list.
VIDEO ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
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